Blog: Bangladesh feels retailers' wrath
Leonie Barrie | 5 February 2010
Is it any coincidence that Wal-Mart’s International CEO has paid a short and unannounced visit to Bangladesh just as 11 global retailers called on the Bangladeshi Prime Minister to take “swift action” over the country’s notoriously low wages for garment workers? The retailers, including Wal-Mart, fear the strikes, protests and factory closures that seem to be endemic in Bangladesh are a risk and could taint their reputations as socially responsible companies.
One company that knows how damaging this can be is UK fashion chain Primark, which is a regular target for campaign groups. It was most recently accused of using Bangladeshi sweatshops in the capital Dhaka where garment workers were paid as little as GBP19 a month – less than half a living wage – making its T-shirts, skirts, trousers and babywear.
Local media in Bangladesh are hopeful that Wal-Mart’s visit could be a precursor to the US retailer increasing its sourcing from Bangladesh – after all, it has outlined changes in the last few days to shake up its sourcing policy to cut costs by 5-15% within five years.
But it’s unlikely the retail giant would take such a step to up its investment in the country while there’s so much at stake. And Wal-Mart is also leading the way with a pledge to make every factory feeding into its supply chain to drive up social standards. So there’s a lot to lose if it’s credibility takes a hit.
But Walmart apparently buys over a billion dollars worth of readymade garments from Bangladesh annually – a staggering 30% of Bangladesh's garments exports to the US. And if this isn’t enough to persuade the industry to change its ways, then there’s little hope for anyone else.
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